The Bankruptcy Court’s conversion of Section 11 of the Illinois Conveyance Act from a safe harbor provision to a mandatory checklist that must be satisfied to survive avoidance challenges has been reversed (Crane Bankruptcy – D Ct decision). The Central District of Illinois holds compliance with the statute is permissive. While the statute provides that mortgages containing the enumerated terms, including the interest rate and maturity date of the underlying debt, are valid and binding, the inverse is not necessarily true. See 765 ILCS 5/11. The Court highlights that the statue is silent regarding mortgages that do not contain all of the enumerated terms. Thus, it is possible that a mortgage with missing terms can nevertheless provide constructive notice. Continue Reading
Illinois Court Upholds Carve-Out Provision of Guaranty Triggered by Guarantors’ Challenge to Lender’s Remedies
Posted in Corporate Real EstateLenders operating under Illinois law scored a victory when an Illinois appellate court held that the carve-out provision in the guaranty was valid and enforceable. Bank of America vs. Freed, Nos. 1-11-0749, 1-11-2112, 1-11-3372, 2012 WL 6725894 (Ill. App. 1 Dist. Dec. 28, 2012). Carve-out provisions operate to incentivize borrowers and guarantors to forego certain enumerated actions in exchange for limited liability under a guaranty. In the event that the borrower and/or guarantor choose to engage in the proscribed conduct, expanded or full recourse is allowed. Continue Reading
Missouri House Bill 446 would prohibit local ordinances from interfering with the servicing or enforcement of real estate loans under state law
Posted in Legislation, Real Estate FinanceThe St. Louis mortgage industry has been in an uproar since the St. Louis County Council passed the Mortgage Foreclosure Intervention Code late last year, which required lenders to offer mediation to homeowners before foreclosing on residential property. Although the Missouri court system is still trying to sort out whether the ordinance is in violation of Missouri law, Representative John Diehl of Missouri’s 89th District has sponsored a bill [pdf] in the Missouri House of Representatives which would quash St. Louis County’s ordinance and any other local law which would interfere with foreclosing on a mortgage or deed of trust under Missouri state law.
House Bill 446 was introduced and read a first time in the Missouri House on February 5, read for a second time on February 6, and was referred to the Financial Institutions Committee on February 14. The Financial Institutions Committee convened on February 20, where House Bill 446 received a “Do Pass” recommendation. To date, House Bill 446 has not yet been placed on the House calendar for a third and final reading. As always, we will provide updates as House Bill 446 continues through the Missouri legislative process.
Trouble in Miami Beach: A Case Study of the Hotel Management Agreement Controversy at Eden Roc Renaissance Hotel
Posted in Corporate Real EstateBy: Heidi M. Seal and Shane C. Orr
In November, 2012, the Supreme Court of the State of New York, County of New York (“NY Supreme Court”) issued certain preliminary rulings in Eden Roc, LLLP vs. Marriott International, Inc., Marriott International Design & Construction Services, Inc. and Renaissance Hotel Management Company, LLC and Marriott International, Inc. and Renaissance Hotel Management Company, LLC vs. Eden Roc, LLLP that were adverse to the hotel owner concerning the interpretation and enforcement of the hotel management agreement at issue. The rulings are in contravention of the principle that hotel management agreements are governed by common law agency principles (even despite contrary language in a hotel management agreement). The rulings could have far-reaching implications on the enforceability of hotel management agreements. Continue Reading
Missouri Guarantors’ Protection Under the ECOA Was Short-Lived
Posted in Corporate Real EstateWhat Missouri state court giveth, Missouri federal court taketh away. The Western District has decided whether the Equal Credit Opportunity Act (“ECOA”) applies to guarantors. Good news, Creditors! It does not. Less than four months following Frontenac Bank v. T.R. Hughes, Inc. in which the Missouri Court of Appeal’s held that guarantors are protected under the ECOA, as provided for in Regulation B, the Western District holds that Regulation B’s expansion of the categories of persons protected under the ECOA is unauthorized and thereby limits the statutory protections to the extent originally intended by Congress. Continue Reading
UPDATE: Missouri Court of Appeals grants temporary injunction against St. Louis County’s foreclosure mediation ordinance
Posted in Real Estate FinanceOn Friday, January 18, the Missouri Court of Appeals for the Eastern District issued an injunction preventing enforcement of a St. Louis County ordinance requiring lenders to offer mediation services before foreclosing on residential property. Enforcement of the ordinance will be enjoined until at least April, when the court is scheduled to hear arguments on the ordinance’s merits. This is the second time enforcement of the ordinance has been enjoined by a Missouri court. As we previously reported, the St. Louis County Circuit Court granted a temporary restraining order on September 27 of last year, preventing the ordinance from going into effect as expected a day later. After a hearing on November 14, the circuit court lifted its injunction, allowing the ordinance to go into effect. This renewed injunction has resulted from an appeal by the Missouri Bankers Association and Jonesburg State Bank.
We will continue to provide updates as the case progresses.
Charles Renner and Jaclyn Maloney to Speak on Real Estate Development for NBI CLE on January 17, 2013
Posted in Design and Construction, Economic Development, Real Estate Finance, Zoning, Land Use & Municipal LawCharles Renner and Jaclyn Maloney, attorneys in Husch Blackwell LLP‘s Kansas City office will be speaking at a National Business Institute seminar entitled “Real Estate Development: A Legal Primer” on Thursday, January 17, 2013 at the Doubletree Hotel – Overland Park. Charles will be speaking on development plan considerations and Jaclyn will be speaking on development financing. Their presentations are part of a full day program designed for attorneys, developers, lenders, investors, brokers, accountants, asset managers, architects, business leaders, and paralegals. Continuing education credits are available for the various professional disciplines. You can find more information and register here.
Ten Simple Suggestions for Drafting Better Real Estate Documents
Posted in Corporate Real EstateWhile the primary focus in drafting real estate documents is to ensure that the substance of the document captures the intent of the parties, this should not be the drafter’s only focus. For example, details often considered “minor” could affect the substance of the document, frustrating the parties’ intent. However, even items that can properly be considered “style” or “formatting” play an important part in the process of drafting, negotiating, and implementing real estate documents. Practitioners can – and should – improve the quality of all of their documents by keeping this in mind throughout the drafting process. While there can be no definitive list of do’s and don’ts for these style and formatting issues, the ten simple suggestions below address many of the most commonly occurring style and formatting issues found in commercial real estate documents and serve as useful examples of how careful style and formatting choices can improve the overall quality of a document, thereby improving it efficiency and effectiveness. Continue Reading
Avoiding common pitfalls in building and zoning permit applications
Posted in Design and Construction, Zoning, Land Use & Municipal LawBusinesses and developers often apply for zoning permits and building permits from the municipalities in which they operate or wish to establish an operation. In the excitement and rush to get a new project under way, occasionally businesses file applications for the wrong permit or make mistakes or provide incorrect information on the application itself. This post will help you understand when some form of zoning approval is needed and when a building permit is required and explain potential consequences of mistakes in filing permit applications. Continue Reading
UPDATE: St. Louis County’s foreclosure mediation ordinance will go into effect
Posted in Real Estate FinanceOn November 14, the Circuit Court of St. Louis County lifted a temporary restraining order against St. Louis County’s Mortgage Foreclosure Intervention Code [pdf], allowing an ordinance to go into effect which requires lenders to offer mediation to homeowners before foreclosing on residential property. The court ruled [pdf] the ordinance was not pre-empted by state foreclosure law and cited the county’s valid exercise of its police power. We previously reported that the temporary restraining order was issued on September 27 at the request of the Missouri Bankers Association and Jonesburg State Bank. While foreclosing lenders now must comply with the terms of the ordinance or be subject to a fine of up to $1000, the St. Louis Post-Dispatch reported that the Missouri Bankers Association and Jonesburg State Bank plan to appeal the court’s ruling. Continue Reading
Subscribe via RSS
View Our LinkedIn Profile